After November 13, NSE will stop offering weekly index derivatives for the Bank Nifty, Nifty Midcap, and Finnifty.

After November 13, NSE will stop offering weekly index derivatives for the Bank Nifty, Nifty Midcap, and Finnifty.

In a circular on October 10, the National Stock Exchange (NSE) announced that weekly index derivatives contracts for Bank Nifty, Nifty Midcap Select, and Nifty Financial Services will be phased out. The dates of effect are November 13, 18, and 19, respectively.

The NSE will only provide the Nifty 50 index for weekly futures contracts after these modifications. This action is in compliance with a recent regulation from SEBI, stating that as of November 20, exchanges are only allowed to provide weekly options expiries on a single index per exchange.

On October 1, the market regulator SEBI introduced additional steps to strengthen the index derivatives framework with the goal of protecting investors and enhancing market stability.

Limiting derivatives contracts to a single benchmark index per exchange with weekly expiries is a significant improvement. Exchanges are also required to keep an eye on intraday positions at least four times a day. Violations of intraday restrictions will result in fines that are applied at the end of the trading day.

In order to combat the speculative character of trading index derivatives, especially on expiry days, certain procedures were put in place.
The modification is a reaction to a guideline issued by the SEBI, which requires exchanges to cut the quantity of weekly options contracts offered to clients to just one, starting on November 20.

The purpose of this rule is to combat the recent increase in retail options trading, which the government and SEBI view as a possible risk to household finances.

According to a SEBI study, over the three years ending in March 2024, individual traders lost a combined 1.81 trillion rupees ($21.57 billion) in futures and options, with just 7.2% of traders making a profit.

The BSE declared on October 3 that weekly index futures contracts for the Sensex50 will end on November 14 and those for Bankex will end on November 18, in compliance with SEBI norms. These changes are in line with SEBI’s goal of bolstering the market for stock index derivatives and improving investor safety.

Shares of Adani Enterprises fall 2% as the firm approved the sale of 4,200 crore shares through QIP.